Disproving Knight’s Predatory and Stupid Theory of Toll
7 Pages Posted: 21 Dec 2013 Last revised: 10 May 2019
Date Written: December 19, 2013
Abstract
Toll and its robber barons were things of the past, and should not exist any more, if not for a theory by Frank Knight. This paper disproves his net gain argument, and shows contrarily that toll inflicts immense external loss and functions like demolishing a good road. This paper also uses Knight’s own inelastic demand to disprove his congestion argument, and corrects him that a good new road is meant to solve congestion on the bad old road. Finally, this paper works out the optimal toll for private roads, to show in contrast that Knight’s toll is both predatory and stupid.
Keywords: Traffic, Toll
JEL Classification: R41
Suggested Citation: Suggested Citation